Correlation Between Atlanticus Holdings and Qudian

Can any of the company-specific risk be diversified away by investing in both Atlanticus Holdings and Qudian at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Atlanticus Holdings and Qudian into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atlanticus Holdings and Qudian Inc, you can compare the effects of market volatilities on Atlanticus Holdings and Qudian and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Atlanticus Holdings with a short position of Qudian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlanticus Holdings and Qudian.

Diversification Opportunities for Atlanticus Holdings and Qudian

0.59

Correlation Coefficient

Atlanticus Holdings  Qudian

Very weak diversification

The 3 months correlation between Atlanticus and Qudian is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Atlanticus Holdings and Qudian Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qudian Inc and Atlanticus Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Atlanticus Holdings are associated (or correlated) with Qudian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qudian Inc has no effect on the direction of Atlanticus Holdings i.e., Atlanticus Holdings and Qudian go up and down completely randomly.

Pair Corralation between Atlanticus Holdings and Qudian

Given the investment horizon of 90 days Atlanticus Holdings is expected to generate 1.06 times more return on investment than Qudian. However, Atlanticus Holdings is 1.06 times more volatile than Qudian Inc. It trades about -0.03 of its potential returns per unit of risk. Qudian Inc is currently generating about -0.03 per unit of risk. If you would invest  5,662  in Atlanticus Holdings on December 29, 2024 and sell it today you would lose (484.00) from holding Atlanticus Holdings or give up 8.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Atlanticus Holdings  vs.  Qudian Inc

Atlanticus Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atlanticus Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Atlanticus Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Qudian Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qudian Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Qudian is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Atlanticus Holdings and Qudian

The main advantage of trading using opposite Atlanticus Holdings and Qudian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlanticus Holdings position performs unexpectedly, Qudian can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Qudian will offset losses from the drop in Qudian's long position.

The idea behind Atlanticus Holdings and Qudian Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.